Purpose of a Business

Introduction: As we begin 2020 and a new decade I am thinking of not just what we want to achieve in the new year but also how we want to set the stage for a decade long journey in front of us and beyond. This thinking led me to ask - what is our higher purpose as a business? Why do we want to exist in the first place? 

The answer I came up with is - the purpose of a business is to serve and benefit the society and the world at large in a measurable way. To do that a business first has to survive and become sustainable and profitable so that it really has something of value to offer the society. To survive and sustain, a business first has to have the right mix of products or services that fulfil a specific need(s) in the market that has a growth trajectory over time so that the business can be scaled to meet the growing demand in the market. Next, it needs to have a relentless focus on its customers and their changing needs and a competent team to deliver on those needs. Together with that, it needs to have a right culture and governance structure in place. These ingredients will help the organization survive and prosper in the long run and finally achieve its higher purpose of serving the community and world at large. 

Be healthy, wealthy and wise: The combination of customer focus, culture and governance structure is what keeps the organization healthy, wealthy and wise and ensures its continued existence. Culture keeps the organization healthy, focus on the customer and their need and a team to deliver it is what keeps the organization wealthy and having the right governance structure keeps the organization wise. A business has to first serve the needs of its customers and employees and have the right culture and structures in place before it can serve the society and the world at large.  Let’s take a look at these areas in some detail. 

How does one serve its customers? It is true that without the customer there is no business. And getting or acquiring customers is hard and keeping them is even harder. So, to serve the customer it starts with having a deep understanding of their need more than they have themselves. To gain that understanding one has to understand the environmental factors at the macro and micro levels. Macro-level is related to the customer industry as a whole, while micro-level pertains to a specific customer or specific business with their own specific needs and pain points. Once you identified the issues faced by the customer you have to make sure you have the right tools in your toolbox to solve those problems. That will require building the right toolset and as things change at the customer end you will need to ensure that you are updating your toolset to keep up with the needs of your customer. So the right tools set are important and equally important is the skills you need to develop to use the tools in the most effective and efficient way. So you need to have the right people who are experts in the client domain and use of the toolset. 

How does one serve its employees: Treating your employees with respect and looking after their welfare. Providing the right work environment, having processes and policies in place to make working efficient and fun. Employees should enjoy coming to work and look forward to coming back to the office on Monday morning. This is only possible if they are considered not as employees but as partners in serving the customers. Good office layout. Coffee/Tea/water/ Kitchen/Play/reading area is essential for a free and relaxing environment. The office should be a place where employees like to come, contribute ideas and make a significant contribution to making a big difference in how the clients view and experience the company and its products and services. And in doing so and by a fair and equitable compensation system are able to realize their dreams and aspirations both for themselves and their families.  

Culture: The importance of the right culture is very important to the success of a business. Without it, it is like a body without the soul. Culture is all about the value system of the company. Culture is the moral compass of the organization - what it stands for e.g. integrity and honesty and what it will not do e.g. unlawful activities. How it treats its customers, employees and the society in general. Respect for the laws of the state. Its policies and practices with respect to gender equality and diversity. Although culture is everybody's business in the organization its roots are planted by the founder(s) or CEO of the company. The culture is set at the start of a business and not as an afterthought to look good. Culture has to permeate every action and activity conducted by the business to keep it from making mistakes and preserve its reputation. Reputation is the biggest value for organizations today, you lose it and you have lost everything. It takes decades to build a brand or reputation, however, it takes just a few seconds to lose it all. 

Governance Structures: Most sizeable businesses have governance boards that provide oversight to their affairs so that they are conducted in a fair and honest manner according to its policies and practices. The board is representative of the eyes and ears of the investors and other stakeholders. The board should be independent of the organization and chosen based on their value systems and past experience in guiding an organization forward. 

Corporate Responsibility: It's only when a business has survived and grown for at least 5 years and accumulated some wealth and resources that it can start to focus on its higher purpose of giving to the society in a meaningful and measurable way. I see two areas of contributions. One for kids and ills in society and the other for helping entrepreneurs start new businesses and solving challenging problems. For example, strong kids make strong communities so a focus on child education and needs will be important as also food and clothing, love and affection so that they grow as confident and strong citizens. Other ills in society e.g. violence, drug use, homelessness etc. should also be tackled and dealt with. That is on the lower end of the rung but also giving people in the middle rungs who want to start new businesses and enterprises.

Parting thoughts: The purpose of a business is to create wealth and resources that ultimately work for the benefit and upliftment of the poor and less privileged among us so that they are able to realize their full potential and contribute to strengthening and growth of their communities and the nation as a whole. 

I want to dedicate this article to two people - Warren Buffet and Bill Gates, who I admire and am inspired by. They are my idols. I hope one day I am able to do a very small fraction of what they have done, are doing and continue to do for the world.